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TRADE MINISTER COMMENT
The Trans-Pacific Partnership:
seizing the day
Steven Ciobo, minister for trade, tourism and investment, discusses how TPP-11
will further enable businesses to benefit from regional value chains
THE COMPREHENSIVE AND
Progressive Agreement for Trans-Pacific
Partnership, or TPP-11, is a highly
ambitious free trade agreement (FTA)
signed on 8 March 2018 by Australia,
Brunei, Canada, Chile, Japan, Malaysia,
Mexico, New Zealand, Peru, Singapore
and Vietnam. It is set to provide new
opportunities for Australian exporters
and importers as well as shippers,
customs brokers and freight forwarders.
The TPP-11 will liberalise more than
98% of tariffs in a trade area that has a
GDP of $13.7 trillion and encompasses
nearly 500m consumers. The Turnbull
government is working hard to ensure
our businesses can take advantage of the
deal as soon as possible.
THE IMPACT OF THE TPP-11
The TPP-11 is much more than a
traditional tariff-cutting deal – this
agreement will dismantle some of the
most persistent barriers to free trade. It
has a single set of rules of origin, allowing
exporters to complete one standard set of
documentation to claim preferential tariff
treatment within the TPP-11 market, and
will allow producers to self-certify.
The agreement includes modern
rules that will provide certainty to
traders when liaising with customs
authorities. It will also provide certainty
around customs processes by allowing
for advance rulings on the tariff
classification of a good; how it should
be valued; from where the good is
originating and how to claim preference;
and independent review of decisions by
customs authorities.
For the first time in a regional
agreement, duty-free entry will be given
to the temporary entry of containers
and pallets involved in transporting
goods. This will reduce costs considerably
for Australian exporters and transport
companies, who currently pay duties as
high as 20% in some TPP-11 countries.
Malaysia has also guaranteed its current
investment regime for freight transport
(with a foreign equity regime of 49%)
and has guaranteed that any future
market reforms will flow through to
Australian producers.
In addition, the TPP-11 promotes high
quality standards for the treatment of
express shipments, including courier
services. It encourages the provision of
information before a shipment arrives
and demands minimal documentation
requirements. The TPP-11 encourages
the adoption of simplified customs
procedures, thereby reducing the time
taken to clear goods by allowing advance
electronic submission and processing
of customs information and allowing
goods to be released before the final
determination of customs duties.
The TPP-11 will further enable
Australian businesses to benefit from
regional value chains. It does so by
allowing countries to specialise in
their respective areas of comparative
advantage, which in turn delivers a boost
in productivity and extra income for
Australian businesses.
This agreement, at its core, operates
on the principles of openness, fair
competition and transparency. The scope
of this deal and its level of ambition
cannot be underestimated. The TPP-11 will
have a major impact on our region’s trade
and economic landscape, and its reach will
naturally expand as more countries sign
up for membership, increasing the size and
significance of the agreement.
SO WHAT’S NEXT?
The TPP-11 is currently undergoing
parallel parliamentary review processes
Above: Steven Ciobo, minister for trade,
tourism and investment
This agreement, at its core, operates on the principles
of openness, fair competition and transparency
in the countries it covers. The
agreement is to enter into force
60 days after six of the 11 signatories
have ratified the agreement. It is
important that Australia is a part of
this first wave of countries that ratify
the new agreement. The government
is focused on concluding Australia’s
domestic treaty-making processes as
swiftly as possible.
GETTING THE BENEFITS
To make it easier for Australian
businesses to enjoy the benefits of FTAs,
the FTA Portal (ftaportal.dfat.gov.
au/), maintained by the Department
of Foreign Affairs and Trade, can help
importers and exporters understand
which FTA suits their business best.
And, for more information on the
TPP-11, please visit dfat.gov.au/trade/
agreements/not-yet-in-force/tpp-11.
Image supplied
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First published in 1891
July 2018
thedcn.com.au